WASHINGTON, Dec. 17 (UPI) -- The development of China's natural gas sector offers "golden opportunities" for investors, a report by the China Energy Fund Committee says.
Patrick Ho, deputy chair and secretary general of the Hong Kong think tank, released the "China Energy Focus: Natural Gas 2013" report Monday at the National Press Club in Washington D.C. The study said natural gas "appears to be a most feasible and accessible option to aid in resolving China's energy dilemma," China's official state-run news agency Xinhua reports.
China's consumption of natural gas in the first three quarters of 2013 grew by 13.5 percent from the same period last year, while growth in production was just 9.2 percent, said China's National Reform and Development Commission.
The report notes that while China has a massive reserve of unconventional gas such as shale gas, there are challenges facing its development, including exploration rights, pipeline infrastructure, drilling and exploration technologies as well as accurate statistics for commercial supply.
The U.S. Energy Department's Energy Information Administration says China may hold nearly twice as much as the estimated 862 trillion cubic feet of shale natural gas in the United States, where the resource has transformed the energy sector.
Under the Chinese government's latest five-year plan, China aims to produce 6.5 billion cubic meters of shale gas a year by the end of 2015.
Ho said the development of natural gas in China "offers golden and attractive opportunities to investors, entrepreneurs, collaborators and keen professionals."
Currently, however, international oil and gas players can only become involved through non-majority joint ventures with China's state-run oil and gas giants -- PetroChina, Sinopec and China National Petroleum Corp.
China's shale reserves are considered more geologically complex than those in the United States. While U.S. shale gas deposits typically are located 6,600 feet to 13,000 feet below the surface, China's shale gas deposits are deeper at around 13,000 feet.
It costs approximately $3.2 million to drill a shale natural gas well in the United States, but in China it costs about $14.7 million, Platts news service reported in October.
Shale gas in China accounts for just 1 percent of the country's total natural gas production.
In the first half of this year, 56 shale gas wells were in the exploratory phase in China, but only 24 were producing gas.
To further pursue development of unconventional gas, the China Energy Fund Committee report suggests that China develop more drilling technologies, pipeline networks and set a market-oriented approach for gas pricing and development rights.